What are ASM and GSM stocks?3 min read
Additional Surveillance Measures (ASM) and Graded Surveillance Measures (GSM) are measures taken by SEBI to safeguard the interest of investors and enhance market integrity.
These measures are in conjunction with the other surveillance measures like price band, periodic call auction, Trade to Trade segment, etc imposed by the regulator.
Do note that on Paytm Money, once a stock has been placed under the ASM list, intraday trading is not allowed. For GSM stocks, both intraday and delivery trades are prohibited.
These lists are subject to change, so investors should keep an eye out for updates.
When are stocks put under surveillance?
The objective of putting stocks under surveillance measures is to:
- Alert and advise investors to be extra cautious while trading in these securities
- Advise market participants to carry out necessary due diligence while dealing in these securities
There are different sets of criteria defined by the regulator for putting stocks under ASM or GSM. Shortlisting of stocks to be placed in ASM is done by SEBI in consultation with exchanges and is based on volatility, price variation and a number of other factors.
To understand the criteria for the inclusion and exclusion of securities under the ASM framework, you can check the NSe’s responses to some FAQs here.
Stocks are placed under GSM when their price is not commensurate with their financial health and fundamentals of the company like Earnings, Books Value, Fixed Assets, Net Worth, P/E multiple, Market Capitalization etc.
You can refer to this list of FAQs here to know more about the exact criteria used by the regulator along with the exchanges to identify stocks under GSM.
The regulator reviews the stocks under ASM and GSM lists periodically and based on the criteria may move them up or down in the surveillance hierarchy or exit them from the list.
Impact on Trading stocks under ASM or GSM
There are a number of trading restrictions that come into picture when a stock is put under ASM or GSM list. Depending on the stage and type of ASM list (long term or short term) the stock is placed in, the margin requirement and price band may vary according to the rules defined by SEBI.
To curb speculation trading on such stocks, margin trading is not allowed. As a result, you will not be allowed to place intraday trades on stocks classified under ASM.
Once a stock is classified under GSM, it is placed in one out of six stages where the restrictions get progressively higher with every stage.
At Paytm Money, we do not allow trading in GSM stocks (intraday or delivery) to safeguard the interests of our users.
How do I know which stocks are placed under ASM or GSM?
At Paytm Money, our InvestCare can help you identify stocks under ASM or GSM by showing you a note on such stocks in the Company page and the Order Pad.
The ASM and GSM lists are not permanent and change from time to time. If you’re interested in an ASM or GSM stock, do your research and track updates related to the stock.
Disclaimer: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. This content is purely for educational, information and investor awareness purposes only and in no way to be considered as advice or recommendation. Paytm Money Ltd SEBI Reg No. Broking – INZ000240532. NSE (90165), BSE(6707) Regd. Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi – 110019.